NI Recovery Stalls

Northern Ireland's economic recovery stalled in September, as output fell for the first time in a year and a half, according to the latest PMI report from Ulster Bank.

The Northern Ireland private sector ended 2014 on a downbeat note, as growth of new business slowed and employment remained broadly unchanged during the last month of the year. The rate of input cost inflation accelerated, but companies continued to lower their output prices.

The Business Activity Index fell below the 50.0 no-change mark for the first time since June 2013. It posted 49.8 in December, indicating a drop from 52.6 in the previous month. This fall in activity contrasted with ongoing growth across the UK economy as a whole. Some panellists also reported a slowdown in demand during the final quarter of 2014.

While new orders continued to increase during December, the rate of growth slowed to its weakest in the current 19-month sequence of expansion. New export orders were unchanged after the drops experienced in November.

Outstanding business decreased for the third month running in December, dropping with the strongest decline since March 2013. Lack of new work to replace completed projects was thought to have contributed to the latest fall in backlogs.

Employment in the Northern Ireland private sector was broadly unchanged in December. "Near stagnation" in staffing levels contrasted with a rise in employment across the UK economy as a whole.

The rate of cost inflation accelerated in December, but remained weaker than the series average.

Northern Ireland firms lowered output prices for the fourth consecutive month in December, although only slightly. Competitive pressure is thought to have been the main factor leading charges to decrease. The construction sector was the only area to increase selling prices, with the sharpest fall seen at retailers.

(IT/CD)